US ethylene costs drop as downed plants restart

Ethylene price stability in recent weeks following the earlier, more dramatic price movements, suggests a more balanced supply/demand picture for the chemical. The 68-cent ethylene price seen in late January was the highest level since May 2012 and was the pinnacle of an uninterrupted price increase.

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US ethylene prices declined in early February from the
eight-month peak reached in late January and then plateaued,
signaling a potential improvement in profit margins for
manufacturers heading into spring, according
to a new report from pricing group PetroChem
Wire.

US ethylene costs fell from nearly 68 cents/lb on January
28 to 61.75 cents/lb by February 12 before rebounding slightly
to end the month at 62.75 cents/lb, a 7% overall decline.

At the same time, costs to produce ethylene from ethane rose
from 7.5 cents/lb to 8.5 cents/lb, and propane-based costs rose
from 2 cents/lb to 4.5 cents/lb, according to the report.

Ethylene price stability in recent weeks following the
earlier, more dramatic price movements, suggests a more
balanced supply/demand picture for the chemical.

"Overall, February was a stable month for ethylene and many of
its downstream markets," said Kathy Hall, PetroChem Wire's
executive editor. "During January, some unexpected plant
outages contributed to prices rising. Once those plants came
back online, prices stabilized."

The 68-cent ethylene price seen in late January was the
highest level since early May 2012 and was the pinnacle of an
uninterrupted price increase that began in early
December.

Ethylene prices jumped by nearly 30%, or 18 cents/lb
between early December and late January.

This steady price increase reflected strong domestic and
export demand and tighter domestic supply for polyethylene,
ethylene's largest plastic derivative. The US and Canada
recorded their highest volume of polyethylene exports in three
years in December.

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